Facebook Facial Recognition: Why It's a Threat to Privacy

I bring this up, of course, because Facebook users are clicking their little fingers off tagging those billions of photos, and Facebook is happily adding those tags to its enormous databases of personal information.

Facebook launched a facial recognition system for a small number of users last December, but earlier this month it became a feature of everyone's Facebook account, at least in the U.S. What it is supposed to do sounds innocuous: suggest a tag for uploaded photos based on matches of other photos determined by the software. But it isn't innocuous. It's just plain creepy.

I'm not going off the deep end with scare stories about facial recognition that go something like this: A frat guy sees a woman in a bar that he thinks is hot, snaps her photo with his cell phone camera, and before you know it, he knows who she is, where she lives and anything else that she may have shared on Facebook -- or that her friends may have shared about her.

It doesn't work that way. Nor will you be able to go online, click on a random photo and find out the identity of everyone in it.

So what's the problem? Trust. Facebook hasn't earned it. There's enormous potential for misuse of facial recognition information, and Facebook has a long record of misusing all sorts of data.

Privacy Abuse Pays

Then the cycle starts all over, as it did last year when the Wall Street Journal learned that it's not just Facebook that's harvesting personal data but Facebook's platform developers as well. That data, some of which made it possible to identify specific users, was being shared with advertisers and Internet tracking companies, whether those users had opted for privacy or not.

Why would Facebook do such a thing? In a word, money. There's a wonderfully symbiotic relationship between Facebook and the major app developers. Apps make the Facebook service much more attractive; indeed the proliferation of cool add-ons propelled Facebook past also-rans like MySpace. And without Facebook, the developers are in Palookaville. Everybody has an incentive to just get along and keep on raking in the bucks.

And those bucks are very big indeed. Facebook is privately held, but it is widely believed to have posted revenue of about $500 million in 2009, and significantly more in 2010. And a big chunk of that, maybe as much as $50 million, came from the sale of virtual goods used with various applications. A report in AdvertisingAge estimated that the aggregate Facebook-related revenue for third party developers was actually larger than that of Facebook itself. Facebook has to be thinking of a way to cash in on that, perhaps a revenue sharing arrangement for the sale of virtual goods.